| Subject: | Re: [socialcredit] 10 can't pay 11 fallacy, continued | | Date: | Monday, July 16, 2007 10:08:31 (-0400) | | From: | Richard Cook <rickycook21 @.......com>
|
| In reply to: | Message 4926 (written by John G Rawson) |
On the question of causes of deficiency in purchasing power I would like to
suggest that another cause besides reinvestment may be borrowing from banks
at multiple points in the production process and also debt the firm is
saddled with when it is subjected to a leveraged buy-out, etc. Any comments?
>From: "John G Rawson" <johngrawson@hotmail.com>
>Reply-To: socialcredit@elistas.com
>To: socialcredit@elistas.com
>Subject: Re: [socialcredit] 10 can't pay 11 fallacy, continued
>Date: Mon, 16 Jul 2007 10:55:46 +0000
>
>
>Thanks, Martin. Just covering my argument a little to allow for the finer
>points of banking, to try to avoid being led off on a side issue..
>
>Obviously, if a manufacturer invests some of his income in new production,
>that sum is charged into two sets of goods and only used to purchase one.
>We are all familiar with that scenario.
>
>I am sure the banks do not pay out all their earnings as salaries, rent,
>power and fleet charges etc. But I am also sure that the process is
>confused in their case because of the destruction of money paid back to
>them and re-creation when they pay out. I think this covers the "early
>retirement of money" case that has been quoted.
>
>The more I see of argument here and elsewhere, the more I feel that the
>only cause of the deficiency in purchasing power is reinvestment. I know
>Douglas quoted raw materials, which was correct for the businesses he
>studied. But then he didn't study an organisation that produced nothing
>but raw materials.
>
>Regards. John R.
>
>
>From: Martin Hattersley <hattersleyjm@interbaun.com>
>Reply-To: socialcredit@elistas.com
>To: socialcredit@elistas.com
>Subject: Re: [socialcredit] 10 can't pay 11 fallacy, continued
>Date: Sun, 15 Jul 2007 12:42:12 -0600
> >John -
> >
> >Would you expand a little on the concept of "reinvestment in some
> >form"? I'm not clear what you mean by this, even though it is a
> >promising lead.
> >
> >Martin Hattersley
> >5929 - 189 St., NW
> >EDMONTON AB CANADA T6M 2J1
> >(780)483-5442
> >
> >e-mail: jmartinh@shaw.ca
> >
> >----- Original Message ----- From: "John G Rawson"
> ><johngrawson@hotmail.com>
> >To: <socialcredit@elistas.com>
> >Sent: Saturday, July 14, 2007 5:37 PM
> >Subject: RE: [socialcredit] 10 can't pay 11 fallacy,
>continued
> >
> >
> >>Thanks, Bill. I agree with this absolutely except for one
> >>reservation: banks also carry out the equivalent of reinvesting;
> >>they do not pay out all their income in the way you suggest.
> >>
> >>But your argument shows up the fallacy in the "Island" example and
> >>I believe it explains why many Social Crediters have brought
> >>ridicule on the movement by greatly overestimating the "gap" in the
> >>eocnomy as a whole.
> >>
> >>And I stick with my suggestion that the main, possibly sole, cause
> >>of the discrepancy Douglas discovered can be attributed to
> >>reinvestment in some form, where costs are charged twice into the
> >>price of goods but the equivalent purchasing power is only paid out
> >>once.
> >>
> >>Regards. John
>R.
> >>
> >>
> >>------------------------------------------------------------------------------
> >> From: <william_b_ryan@yahoo.com>
> >> Reply-To: socialcredit@elistas.com
> >> To: socialcredit@elistas.com
> >> Subject: [socialcredit] 10 can't pay 11 fallacy, continued
> >> Date: Thu, 12 Jul 2007 09:44:00 -0700 (PDT)
> >> >"Therefore, I suggest: a) Two boxes one for the
> >> >principal the other for interest: b) The interest can
> >> >be reused but only paid in full only at the end. c)
> >> >The principal paid cannot be re-used."
> >> >------------------------------------------
> >> >
> >> >Naturally on these restrictions 10 cannot pay 11. When
> >> >10 in principal is repaid there is a remaining
> >> >1 owed that cannot be paid
>inasmuch as there is no
> >> >money in existence. It must be borrowed thereby
> >> >compounding the debt. That is how this fallacy goes.
> >> >
> >> >But it doesn't begin to describe the real world
> >> >condition. In the real world banks are members of
> >> >their communities, spending for goods and services
> >> >needed to perform their services and conduct their
> >> >operations, as does every firm in their communities.
> >> >The economy is a great cooperative commonwealth in
> >> >continuous rotation. So, during the period that 1 in
> >> >interest accrues, banks are spending, which increases
> >> >the money in circulation available to pay both
> >> >principal plus interest back to the banks.
> >> >
> >> >If banks create the money that
>they loan, they are
> >> >certainly capable of creating the money that they
> >> >spend during the period that 10 is lent and 11 becomes
> >> >due, before they have received the first payment in
> >> >this tortured example. During this period their
> >> >spending is charged against their accrued income
> >> >accounts.
> >> >
> >> >It's all done according to the rules of double entry
> >> >accounting consistent with the concept of profit and loss.
> >> >
> >> >
> >> >
> >>
> >>
> >>
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